Boullioun Aviation, which aspires to be the world's number three aircraft lessor, is about to change owners. In a $120 million deal, which the parties hope to close before year-end, Japan's Sumitomo Trust and Banking has agreed to sell Boullioun, a wholly owned subsidiary, to Germany's Deutsche Bank.
Seattle-based Boullioun expects no change in management or operations, but links to Deutsche Bank could improve its access to capital and synergies with other branches of the German banking group.
Boullioun has not relied on the Sumitomo Trust for guarantees or financial support. "We had positioned ourselves as a standalone borrower," says Robert Genise, Boullioun's chief executive. "It's better for the company. You need to develop good banking relationships," he adds. But Genise believes that Deutsche Bank's financial strength "creates greater opportunities."
Earlier this year Genise noted that Boullioun paid more for financing than its part-owned subsidiary, Singapore Aircraft Leasing Company (SALE). According to Genise, lenders perceived SALE as a safe Singapore company, while Boullioun was seen as the subsidiary of a Japanese bank.
The decision by Sumitomo Trust to sell Boullioun came after Standard and Poors downgraded the bank's credit rating. Boullioun was not a problem asset for Sumitomo - indeed the lessor had built its portfolio value to nearly $1 billion - but the bank needed assets with greater short-term return.
* Ireland's GPA is also due to re-emerge from under the wing of GE Capital - the US investment giant which rescued the troubled lessor from near-bankruptcy five years ago. The proposals would leave Texas Pacific, an investments vehicle for US entrepreneur David Bonderman, as the largest single shareholder. Bonderman already holds a stake in Ryanair, the low-cost carrier which, like GPA, was founded by the Ryan family.
Source: Airline Business
